How do fluctuations in autonomous expenditure influence real GDP?

What will be an ideal response?


Fluctuations in autonomous expenditure bring business cycle turning points. When autonomous expenditure changes, the economy moves from one phase of the business cycle to the next. For example, if autonomous expenditure decreases, equilibrium expenditure and real GDP decrease and, as a result, the economy enters the recession phase of the business cycle.

Economics

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The main reason people hold money is that

A) money is intrinsically valuable. B) money is used to buy goods and services. C) money is power. D) money provides a standard of value.

Economics

A contestable market is a market

a. that is highly contested by two, and only two, rival firms. b. in which the costs of entry and exit are low. c. characterized by high profitability and government regulation. d. characterized by a large number of firms; in essence, the term means the same thing as pure competition.

Economics

In the classical model, what occurs if a wage of $20/hour results in unemployed workers?

A) The wage rate will drop, more workers will be hired, and the unemployment rate falls. B) Producers will quickly create more jobs and hire the unemployed workers, so unemployment is short-lived. C) The workers will go on strike to demand that more jobs be created. D) The government will step in and order firms to hire more workers.

Economics

The value of a network

A) is related to how many are in the network. B) is not related to how many are in the network. C) is related to its impact on diminishing marginal returns. D) none of these choices.

Economics